S.22 of SICA does not create any legal impediment for instituting and proceeding with a criminal case on the allegations of an offence under S.138 of the NI Act against a company or its Directors.

1. Leave granted.

2. The common question that arises for consideration in these appeals is whether a company and its Directors can be proceeded against for having committed an offence under S.138 of the Negotiable Instruments Act, 1881 (for short'the NI Act') after the company has been declared sick under the provisions of The Sick Industrial Companies (Special Provisions) Act, 1985 (for short'SICA') before the expiry of the period for payment of the cheque amount. The answer to the question depends on interpretation of S.138 of the NI Act and its interaction with the relevant provisions of SICA. Since the relevant facts involved in all the cases are similar and a common question of law arises in all the cases they were heard together and they are being disposed of by this judgment.

3. The factual positions about which there is no dispute may be stated thus: Post-dated cheques were issued on behalf of the company in favour of the complainant in course of business of the company. When the complainant presented the cheques in the bank they were returned without payment. Then the complainant issued notice to the company and/or its Directors stating the facts of dishonour of the cheques and demanding payment. Since no payment was made within the period of 15 days stipulated under the NI Act payee filed complaint against the company and/or its Directors alleging inter-alia that they had committed an offence under S.138 of the NI Act. Before the cheques were presented in the bank or after the bank declined to honour the cheques the drawer company was declared sick under the provisions of the SICA by the Board of Industrial and Financial Reconstruction (for short 'BIFR'). On receipt of the summons from the Court in the criminal case registered on the basis of the complaint the accused company and/or its Directors filed petitions under S.482 of the Code of Criminal Procedure or under Art.227 of the Constitution seeking quashing of the complaint/ proceeding in the criminal case, mainly on the ground that in view of the provisions in S.22 of SICA the criminal case instituted against them for commission of the alleged offence under S.138 NI Act is misconceived and compelling the accused to face trial in the case will amount to abuse of the process of Court. The High Court having declined to interfere in the proceeding and dismissed the petitions filed by the accused, they have filed these appeals challenging the order passed by the High Court.

4. The main thrust of the arguments of the learned counsel appearing for the appellants is that on the company being declared sick by the BIFR no steps could be taken by the complainants for realisation of the amounts said to be due to them and therefore the criminal proceeding initiated against the drawer company and its Director on the allegation that the cheques drawn in favour of the complainant were dishonoured by the bank is misconceived and should be quashed, alternatively it is their contention that the proceedings in the criminal case should be stayed or suspended till the accused company becomes a functional and viable unit. On behalf of the appellants reliance is placed on S.22, 22A of the SICA.

5. The learned counsel appearing for the respondents on the other hand contend that on the undisputed fact situation of the case a prima-facie case under S.138 of the NI Acts is made out against the accused and on being satisfied about this position the learned Magistrate took cognizance of the offence and ordered issue of summons to the appellants. It is their submission that S.22 has no application to criminal proceedings and that the said Section does not bar payment of dues by the accused company or its Directors; an embargo is placed only on the creditors from realising their dues from the company by a proceeding for winding up or execution or distress. It is also the submission of learned counsel for the respondents that the criminal case cannot be said to be a proceeding for realis